Form 8-K Silicon Graphics Interna For: Jan 28
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 8-K CURRENT REPORT
Pursuant to Section 13 or 15(d) of the |
Date of Report: January 28, 2015
(Date of earliest event reported)
Silicon Graphics International Corp.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction
of incorporation)
000-51333
(Commission File Number)
32-0047154
(IRS Employer
Identification Number)
900 North McCarthy Blvd., Milpitas, CA
(Address of principal executive offices)
�
95035
(Zip Code)
669-900-8000
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
- o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
- o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
- o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
- o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
- o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Item 2.02. Results of Operations and Financial Condition On January 28, 2015, Silicon Graphics International Corp. (the "Company") issued a press release announcing financial results for the Company's fiscal second quarter ended December 26, 2014. A copy of the press release is furnished as Exhibit 99.1 to this Current Report and is incorporated herein by reference. The information furnished on this Form 8-K, including Exhibit 99.1 attached hereto, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained herein and in Exhibit 99.1 shall not be incorporated by reference into any filing with the U.S. Securities and Exchange Commission made by the Company, whether made before or after the date hereof, except as expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
� � � Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Dated: January 28, 2015 |
SILICON GRAPHICS INTERNATIONAL CORP.
By: �/s/ Jennifer W. Pileggi � � � � � � � � � � |
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| Exhibit No. | Description |
| 99.1 | Press Release of Silicon Graphics International Corp. dated January 28, 2015 |
SGI Reports Financial Results for the Second Quarter of Fiscal 2015MILPITAS, CA -- (Marketwired - January 28, 2015) - SGI (NASDAQ: SGI), a global leader in high performance solutions for compute, data analytics, and data management, today reported financial results for its fiscal second quarter 2015 ended December 26, 2014.
Total revenue for the fiscal second quarter was $138 million, an increase of 24% from $112 million in the previous quarter and an increase of 19% from $116 million in the second fiscal quarter of 2014.
GAAP net loss for the fiscal second quarter was $10 million, or $(0.30) per share, compared with a GAAP net loss of $10 million, or $(0.30) per share, in the prior quarter, and a GAAP net loss of $14 million, or $(0.40) per share, in the second quarter of fiscal 2014. Non-GAAP net income for the quarter was $0.1 million, or breakeven per diluted share, compared with a non-GAAP net loss of $5 million, or $(0.14) per share, in the prior quarter and a non-GAAP net loss of $7 million, or $(0.20) per share, in the year-ago period.
- Core revenue, which excludes $1 million of revenue related to legacy cloud infrastructure business, was $137 million, an increase of 24% from $111 million in the prior quarter and 29% from $107 million in the same quarter a year ago.
- Revenue from the company's U.S. Federal business was $72 million, an increase of 19% from $61 million in the prior quarter and 63% from $44 million in the same quarter a year ago.
- Core revenue in the company's International and Commercial sectors was $65 million, an increase of 31% from $50 million in the prior quarter and 4% from $62 million in the same quarter a year ago.
"In the second quarter we made progress on our strategic priorities, including large project awards with existing and new customers. Our enterprise growth strategy began to deliver results as we further penetrated various technical computing markets and recognized our first revenue for our UV 300H product. This resulted in the highest bookings quarter we have seen in nearly three years, driven in part by the strength and diversification of our Federal business," said Jorge Titinger, President and CEO of SGI.
In a separate press release, the company today also announced the closing of a $70 million secured term loan facility. "This successful financing enables us to fund working capital for our bookings growth, especially the large Federal program award wins, which have longer award to acceptance cycle times," said Robert Nikl, EVP and Chief Financial Officer.
Recent Highlights
- As part of the Department of Defense's ongoing initiative to improve high performance computing (HPC) resources, SGI was awarded two contracts this quarter totaling approximately $60 million for SGI� ICE" X supercomputers with SGI� InfiniteStorage". The first contract is with the US Engineer Research and Development Center, and the second is with the Air Force Research Laboratory.
- SGI recognized revenue for two NASA contracts this quarter, enabling greater diversification into Federal agencies. The first was with the NASA Ames Research Center which is upgrading its flagship supercomputer, Pleiades. The second was with the NASA Center for Climate Simulation (NCCS), located at NASA's Goddard Space Flight Center, which is enhancing its research and analysis capabilities in climate prediction.
- The IT-4 National Supercomputing Center in the Czech Republic selected the SGI� ICE" XA solution to further its research. At two petaflops, the new supercomputer is expected to rank as one of the 50 largest supercomputers in the world.
Fiscal Third Quarter and Fiscal Year Outlook
The company is providing the following financial outlook:
- The company expects total revenue for its fiscal third quarter ending March 27, 2015 to be in the range of $120 million to $130 million.
- GAAP net loss for the fiscal third quarter is expected to be in the range of $5 to $9 million, or $(0.15) to $(0.25) per share. After excluding approximately $5 million of adjustments for stock-based compensation expense, restructuring and severance costs, intangibles amortization and other items, non-GAAP net loss for the quarter is expected to be in the range of breakeven to $4 million, or $0.00 to $(0.10) per share.
- The company expects total revenue for the second half of fiscal 2015 to be in the range of $290 to $310 million, which represents growth of 16% to 24% over the first half of fiscal 2015, and growth of 9% to 16% over the comparable period last year.
- The company expects total revenue for its fiscal year ending June 26, 2015 to be in the range of $540 million to $560 million, reflecting annual core revenue growth of approximately 8% to 12%.
Webcast and Conference Call Information
Management will host a conference call and a live webcast of the earnings conference call will be available on the Investor Relations section of the Company's website at investors.sgi.com beginning at 1:30 p.m. PT (4:30 p.m. ET). A replay of the webcast will be available approximately two hours after the conclusion of the call and will remain available until the next earnings call.
The public can also listen to the 1:30 p.m. PT (4:30 p.m. ET) earnings conference call by dialing (888) 463-5422 (toll-free) or (970) 315-0484 (international). An audio replay of the conference call will also be made available approximately two hours after the conclusion of the call. The audio replay will remain available for five days and can be accessed by dialing (855) 859-2056 (toll-free) or (404) 537-3406 (international) and entering the confirmation code: 61304846.
About SGI
SGI is a global leader in high performance solutions for compute, data analytics and data management that enable customers to accelerate time to discovery, innovation and profitability. Visit sgi.com for more information.
Connect with SGI on Twitter (@sgi_corp), YouTube (youtube.com/sgicorp), Facebook (facebook.com/sgiglobal) and LinkedIn (linkedin.com/company/sgi).
Forward Looking Statements
The statements made in this press release regarding projected financial results, including SGI's anticipated growth and profitability, guidance for the full year and third quarter of fiscal 2015, and certain statements made in the earnings conference call, are forward-looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. Actual results could differ materially from those described by these statements due to a number of factors, including, but not limited to the following: substantial sales to U.S. government entities, which are subject to the government's budgetary constraints; customer concentration risks; fluctuations in the buying patterns and sizes of customer orders from one quarter to the next; increased competition causing SGI to sell products or services at lower margins than expected; lengthy acceptance cycles of SGI's products by certain customers; development or product delivery delays, and delays in obtaining necessary components from suppliers; the addition of new customers or loss of existing customers; unexpected changes in the price for, and the availability of, components from SGI's suppliers; SGI's ability to enhance its products with new and better designs and functionality; actions taken by competitors, such as new product announcements or introductions or changes in pricing; market acceptance of newer products; and risks related to SGI's credit facility. Some of these risks and uncertainties are described in more detail in SGI's 10-Q, 10-K and other filings with the Securities and Exchange Commission ("SEC") and are available at the SEC's web site at http://www.sec.gov. Forward-looking statements are made based on information available to the company on the date of this press release. The company assumes no obligation to update the information in this press release.
Use of Non-GAAP Financial Measures
This press release and the related earnings conference call include financial measures that are not determined in accordance with U.S. generally accepted accounting principles ("GAAP"), including non-GAAP gross margin, non-GAAP net income (loss) and non-GAAP basic and diluted net income (loss) per share. These non-GAAP measures are not based on any comprehensive set of accounting rules or principles and management exercises judgment in determining which items should be excluded in the calculation of non-GAAP measures. In addition, these non-GAAP measures may be different from non-GAAP measures used by other companies. While we believe that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP, we believe that non-GAAP measures are valuable in evaluating the company's operating performance and analyzing our business operations. Management may exclude the following items from one or more of non-GAAP measures: (1) share-based compensation; (2) amortization and impairment of intangible assets; (3) restructuring and severance charges; (4) excess and obsolete inventory write-off; (5) gains or losses on investments; and (6) other non-recurring costs. Pursuant to the requirements of SEC Regulation G, a detailed reconciliation between SGI's GAAP and non-GAAP financial results is provided in this press release. The adjustments made should not be construed as an inference that all such adjustments or costs are unusual, infrequent or non-recurring. Investors are advised to carefully review and consider this information as well as the GAAP financial results that are disclosed in this release and SGI's SEC filings.
For a full reconciliation of historical non-GAAP measures referenced in this press release or today's presentation to the comparable measures under GAAP, please refer to the company's press releases on its website at www.sgi.com.
� 2015 Silicon Graphics International Corp. All rights reserved. SGI and the SGI logo are trademarks or registered trademarks of Silicon Graphics International Corp. or its subsidiaries in the United States and/or other countries. All other trademarks are property of their respective holders.
Silicon Graphics International Corp.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
-------------------------- --------------------------
December 26, December 27, December 26, December 27,
2014 2013 2014 2013
------------ ------------ ------------ ------------
Revenue $ 138,150 $ 116,060 $ 249,851 $ 263,579
Cost of revenue 101,341 82,577 180,670 191,848
------------ ------------ ------------ ------------
Gross profit 36,809 33,483 69,181 71,731
------------ ------------ ------------ ------------
Operating
expenses:
Research and
development 14,779 14,902 27,979 29,736
Sales and
marketing 16,780 18,815 32,641 36,411
General and
administrative 15,254 14,547 28,559 27,029
Restructuring - 111 116 637
------------ ------------ ------------ ------------
Total
operating
expenses 46,813 48,375 89,295 93,813
------------ ------------ ------------ ------------
Loss from
operations (10,004) (14,892) (20,114) (22,082)
------------ ------------ ------------ ------------
Interest
expense, net (58) (46) (100) (53)
Other income
(expense), net (247) 1,685 (104) 1,988
------------ ------------ ------------ ------------
Total other
income
(expense),
net (305) 1,639 (204) 1,935
------------ ------------ ------------ ------------
Loss before
income taxes (10,309) (13,253) (20,318) (20,147)
Income tax
provision 129 431 453 360
------------ ------------ ------------ ------------
Net loss $ (10,438) $ (13,684) $ (20,771) $ (20,507)
============ ============ ============ ============
Basic and diluted
net loss per
share $ (0.30) $ (0.40) $ (0.60) $ (0.60)
============ ============ ============ ============
Shares used in
computing basic
and diluted net
loss per share 34,375 34,176 34,399 34,136
============ ============ ============ ============
Share-based
compensation by
category is as
follows:
Cost of revenue $ 566 $ 459 $ 1,032 $ 901
Research and
development 659 706 1,218 1,213
Sales and
marketing 764 748 1,565 1,327
General and
administrative 2,182 1,604 3,855 3,052
------------ ------------ ------------ ------------
Total $ 4,171 $ 3,517 $ 7,670 $ 6,493
============ ============ ============ ============
Silicon Graphics International Corp.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 26, June 27,
2014 2014
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 79,294 $ 109,297
Current portion of restricted cash 2,256 2,273
Accounts receivable, net 64,750 72,076
Inventories 76,590 47,354
Current portion of deferred cost of revenue 9,938 12,180
Prepaid expenses and other current assets 11,620 19,802
------------ ------------
Total current assets 244,448 262,982
Non-current portion of restricted cash 2,425 2,177
Property and equipment, net 37,386 34,584
Goodwill and Intangible assets, net 11,656 13,207
Non-current portion of deferred cost of revenue 8,188 7,592
Other assets 43,707 44,396
------------ ------------
Total assets $ 347,810 $ 364,938
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 57,679 $ 53,128
Accrued compensation 16,798 20,049
Short-term debt 1,750 -
Current portion of deferred tax liabilities 15,846 15,846
Current portion of deferred revenue 76,075 78,675
Other current liabilities 28,502 37,814
------------ ------------
Total current liabilities 196,650 205,512
Short-term debt to be refinanced 13,250 -
Non-current portion of deferred revenue 44,872 45,422
Long-term income taxes payable 9,393 10,114
Retirement benefit obligations 11,474 12,931
Other non-current liabilities 8,146 8,807
------------ ------------
Total liabilities 283,785 282,786
Stockholders' equity 64,025 82,152
------------ ------------
Total liabilities and stockholders' equity $ 347,810 $ 364,938
============ ============
Silicon Graphics International Corp.
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(In thousands, except per share data)
(Unaudited)
Three Months Ended
------------------------------------------
December 26, 2014
Net
(Loss)/ Gross Operating
Income EPS Profit Expenses
--------- --------- --------- ---------
GAAP $ (10,438) $ (0.30) $ 36,809 $ 46,813
Share-based compensation (1) 4,171 0.12 566 (3,605)
Amortization and
impairment of acquired
intangibles (1) 1,310 0.04 900 (410)
Restructuring and
severance (2) 3,792 0.11 701 (3,091)
Other non-recurring items (2) 1,268 0.03 10 (1,258)
--------- --------- --------- ---------
Non-GAAP $ 103 $ 0.00 $ 38,986 $ 38,449
========= ========= ========= =========
Gross Margin
Gross margin on a GAAP
basis 26.6%
Gross margin on a Non-GAAP
basis 28.2%
Weighted average shares used
in computing:
Basic net loss per share 34,375
Dilutive net income per
share 35,134
Three Months Ended
------------------------------------------
December 27, 2013
Net Gross Operating
Loss EPS Profit Expenses
--------- --------- --------- ---------
GAAP $ (13,684) $ (0.40) $ 33,483 $ 48,375
Share-based compensation (1) 3,517 0.10 459 (3,058)
Amortization of acquired
intangibles (1) 1,051 0.03 442 (609)
Restructuring and
severance (2) 1,921 0.06 1,171 (750)
Other non-recurring items (2) 2,094 0.06 104 (1,990)
Gain on investment (2) (1,717) (0.05) - -
--------- --------- --------- ---------
Non-GAAP $ (6,818) $ (0.20) $ 35,659 $ 41,968
========= ========= ========= =========
Gross Margin
Gross margin on a GAAP
basis 28.8%
Gross margin on a Non-GAAP
basis 30.7%
Weighted average shares used
in computing:
Basic and dilutive net
loss per share 34,176
Three Months Ended
------------------------------------------
September 26, 2014
Net Gross Operating
Loss EPS Profit Expenses
--------- --------- --------- ---------
GAAP $ (10,333) $ (0.30) $ 32,372 $ 42,482
Share-based compensation (1) 3,499 0.10 466 (3,033)
Amortization of acquired
intangibles (1) 215 0.01 144 (71)
Restructuring and
severance (2) 1,092 0.03 437 (655)
Other non-recurring items (2) 550 0.02 - (550)
--------- --------- --------- ---------
Non-GAAP $ (4,977) $ (0.14) $ 33,419 $ 38,173
========= ========= ========= =========
Gross Margin
Gross margin on a GAAP
basis 29.0%
Gross margin on a Non-GAAP
basis 29.9%
Weighted average shares used
in computing:
Basic and dilutive net
loss per share 34,420
Silicon Graphics International Corp.
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(In thousands, except per share data)
(Unaudited)
Six Months Ended
-------------------------------------------
December 26, 2014
Net Operating
Loss EPS Gross Profit Expenses
-------- -------- ------------ ---------
GAAP $(20,771) $ (0.60) $ 69,181 $ 89,295
Share-based compensation (1) 7,670 0.22 1,032 (6,638)
Amortization and
impairment of acquired
intangibles (1) 1,525 0.05 1,044 (481)
Restructuring and
severance (2) 4,884 0.14 1,138 (3,746)
Other non-recurring items (2) 1,818 0.05 10 (1,808)
-------- -------- ------------ ---------
Non-GAAP $ (4,874) $ (0.14) $ 72,405 $ 76,622
======== ======== ============ =========
Gross Margin
Gross margin on a GAAP
basis 27.7%
Gross margin on a Non-GAAP
basis 29.0%
Weighted average shares used
in computing:
Basic and dilutive net
loss per share 34,399
Six Months Ended
-------------------------------------------
December 27, 2013
Net Operating
Loss EPS Gross Profit Expenses
-------- -------- ------------ ---------
GAAP $(20,507) $ (0.60) $ 71,731 $ 93,813
Share-based compensation (1) 6,493 0.19 901 (5,592)
Amortization of acquired
intangibles (1) 1,886 0.05 697 (1,189)
Restructuring and
severance (2) 2,850 0.09 1,204 (1,646)
Excess and obsolete
inventory (2) 3,242 0.10 3,242 -
Other non-recurring items (2) 2,830 0.08 104 (2,726)
Gain on investment (2) (1,717) (0.05) - -
Income tax abatement (2) (611) (0.02) - -
-------- -------- ------------ ---------
Non-GAAP $ (5,534) $ (0.16) $ 77,879 $ 82,660
======== ======== ============ =========
Gross Margin
Gross margin on a GAAP
basis 27.2%
Gross margin on a Non-GAAP
basis 29.5%
Weighted average shares used
in computing:
Basic and dilutive net
loss per share 34,136
NOTE: This presentation includes certain financial measures not in
conformity with Generally Accepted Accounting Principles in the United
States (non-GAAP measures). Our non-GAAP measures are not meant to be
considered in isolation or as a substitute for comparable GAAP measures, and
should be read only in conjunction with our consolidated financial
statements prepared in accordance with GAAP.
(1) Adjustments to exclude certain non-cash expenses such as share-based
compensation and amortization and impairment of intangible assets.
(2) Adjustments to exclude the items discussed below because such items are
either operating expenses which would not otherwise have been incurred by
the company in the normal course of the company's business operations or
are not reflective of the company's core results over time. These items may
include recurring as well as non-recurring items.
(a) Restructuring Charges and severance - Restructuring charges consist
primarily of severance expense, facility closure and relocation costs.
(b) Other non-recurring items include settlements, headquarters
relocation costs, asset impairments, acquisition- related costs, and costs
associated with contract manufacturing transition / termination.
(c) Excess and obsolete charges related to our strategic withdrawal
from legacy cloud infrastructure and other products that are at the end of
the product life cycle.
Silicon Graphics International Corp.
TRENDED FINANCIAL DATA
(In thousands)
(Unaudited)
Q1 FY14 Q2 FY14 Q3 FY14 Q4 FY14 Q1 FY15 Q2 FY15
-------- -------- -------- -------- -------- --------
Total Revenue
Americas $102,212 $ 62,648 $ 56,554 $ 56,122 $ 67,670 $ 87,615
APJ 24,266 24,383 52,508 35,182 26,418 33,671
EMEA 21,041 29,029 15,221 50,780 17,613 16,864
-------- -------- -------- -------- -------- --------
Total revenue $147,519 $116,060 $124,283 $142,084 $111,701 $138,150
======== ======== ======== ======== ======== ========
Revenue
Product $108,820 $ 77,334 $ 85,927 $102,484 $ 75,002 $100,288
Service 38,699 38,726 38,356 39,600 36,699 37,862
-------- -------- -------- -------- -------- --------
Total revenue $147,519 $116,060 $124,283 $142,084 $111,701 $138,150
======== ======== ======== ======== ======== ========
Cost of revenue
Product $ 88,692 $ 61,343 $ 70,759 $ 84,991 $ 58,893 $ 78,741
Service 20,579 21,234 22,454 21,487 20,436 22,600
-------- -------- -------- -------- -------- --------
Total cost of
revenue $109,271 $ 82,577 $ 93,213 $106,478 $ 79,329 $101,341
======== ======== ======== ======== ======== ========
Gross margin by
Product and Service
Product Gross
Margin 18.5% 20.7% 17.7% 17.1% 21.5% 21.5%
Service Gross
Margin 46.8% 45.2% 41.5% 45.7% 44.3% 40.3%
Total gross
margin 25.9% 28.8% 25.0% 25.1% 29.0% 26.6%
-------- -------- -------- -------- -------- --------
Silicon Graphics International Corp.
CORE REVENUE TREND
(In thousands)
(Unaudited)
Q1 FY14 Q2 FY14 Q3 FY14 Q4 FY14 Q1 FY15 Q2 FY15
-------- -------- -------- -------- -------- --------
Core Revenue
Federal (*) $ 76,374 $ 44,402 $ 45,013 $ 37,077 $ 60,674 $ 72,286
International /
Commercial (**) 55,259 62,482 77,215 103,470 49,841 65,191
-------- -------- -------- -------- -------- --------
Total Core Revenue 131,633 106,884 122,228 140,547 110,515 137,477
-------- -------- -------- -------- -------- --------
Legacy Cloud 15,886 9,176 2,055 1,537 1,186 673
-------- -------- -------- -------- -------- --------
Total Revenue $147,519 $116,060 $124,283 $142,084 $111,701 $138,150
======== ======== ======== ======== ======== ========
(*) Core Federal revenue includes U.S. government customers, system
integrators, and higher education and research institutions
(**) Core International / Commercial revenue excludes revenue related to
legacy cloud infrastructure
Contact Information: SGI Investor Relations Ben Liao (669) 900-8090 [email protected] Annie Leschin (415) 775-1788 [email protected]